Asset Quality Score
Bankrate uses this test to determine the impact of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.
A credit union with lots of these types of assets may eventually be required to use capital to absorb losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, pushing down earnings and elevating the risk of a future failure.
On Bankrate's asset quality test, VALLEY FIRST scored 40 out of a possible 40 points, beating the national average of 38.15 points.
The credit union's ratio of problem assets was 1.00 percent in our test, below the national average and potentially indicative of superior financial strength compared to other credit unions.